FDI cap a dampener |
Some global arms majors remain largely unenthused about the Make in India policy in the face of the continuing 49% FDI cap in the defence production sector, even though the government of India has now allowed it under the "automatic route" instead of the earlier FIPB one.European defence major Airbus Group said a "straitjacketed" 49% FDI limit would not help India get investment, cutting-edge technology and products it needs to bolster its indigenous defence-industrial base (DIB). They need to have more control...49% is not good. Fair business means they need to have levels of control appropriate for the risks they are taking. Airbus India president Pierre de Bausset made it clear his group would be able to invest in Indian defence only if it actually gets contracts .Most global firms will not set up base or transfer crucial technologies to India without management control of JVs.As per the revised FDI policy in defence production, foreign investment over 49% will be allowed only on a case-to-case basis under "the government route" wherever it`s likely to result "in access to modern and state-of-the-art technology in the country".
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